Plus, the president hit the trail in a big way. He says he‘s got a plan to protect you from insurance companies and make their dirty tricks a thing of the past. A former insurance executive who knows just how the game is played joins me, and he‘ll explain what the president has got to do to make this thing right.

Plus, “Psycho Talk.” All that and a great panel.

And I want you to get your phones out. I want to let you decide what hate speech really is.

But first, tonight‘s “OpEd.”

Well, Glenn Beck. I think we have to consider the source on this one. This guy, he‘s one of these guys who throws nasty jabs out there and then goes and hides behind his plastic Jesus. Yes, he‘s one of them.

You see, his culture and roots actually come from an FM radio shock jock career. Nowhere in this background is this guy a credited newsman. Does he even have a degree? He‘s never worked in a newsroom, he‘s never been a beat reporter, producer, or anchor.

You see, folks, his mission is to fire and fire for effect. He appeals to the “Joe the Plumbers” of the world. He‘s one of these flag wrappers. You know, these guys that are out there that wrap themselves in the flag and then pretend that they‘re so much more patriotic and love the country so much more than you do.

Now let‘s get to this racist thing. This is not a freedom of speech issue.

Here‘s what Beck said about President Obama.

(BEGIN VIDEO CLIP)

GLENN BECK, FOX NEWS: This president, I think, has exposed himself as a guy over and over and over again who has a deep-seated hatred for white people. I‘m not saying that he doesn‘t like white people. I‘m saying he has a problem. He has a—this guy is, I believe, a racist.

SCHULTZ: This is not a one-time gaffe. This is a man who called antiwar activist Cindy Sheehan after she lost her son in the sting of battle—called her a tragedy whore. This is a man who asked our first Muslim congressman from Minnesota, Keith Ellison, if he can prove to him that he‘s not working with our enemies.

Fox News has distanced itself from Beck‘s comments about President Obama. They put out a statement today saying, “Glenn Beck expressed a personal opinion which represented his own view, not those of the Fox News Channel. And as with all commentators in the news channel business, he is given the freedom to express his opinions.”

Well, I want to know, how does Mr. Beck expect people to react when he claims the president has a deep-seated hatred for white people? This is an ongoing narrative that right-wing talkers are spinning to their base. It‘s the TEA partiers, it‘s the birthers. Now it‘s the racist attacks.

You have to wonder, when is it ever going to stop? When is it going to be an end game?

I‘ll tell you when there‘s an end game, when the American people are ready to give distinct definition that this guy is a hate merchant. He peddles hate. And you know, in this business, folks, we can do all kinds of stuff to get ratings. Oh, absolutely.

There‘s all kinds of stories out there. There‘s all kinds of topics out there. You‘d be surprised what we can come up with to get ratings. But the fact is, this man has decided to sell hate on the man you elected to be president of the United States. How sad.

Now, I want to know what you think. Here‘s our text question for tonight:

Do you think the right wing‘s verbal attacks on President Obama are, A, free speech, or B, hate speech? Text “A” for free, “B” for hate speech, to 622639.

We‘ll bring you the results later on in the show.

For more, let me bring in Dr. James Peterson, a professor of Africana Studies at Bucknell University.

How are we—you know, just about the time we think we‘re really making progress in the country, that the first black president is elected, gets a mandate of the people, the House, the Senate and the White House, sweeping change, we‘re back to square one in many respects with a guy who has a big audience and a guy who has been in broadcasting but has thrown responsibility to the side of the road and decided to turn our president into road kill.

How do you receive a comment like this?

DR. JAMES PETERSON, PROFESSOR, AFRICAN STUDIES, BUCKNELL UNIVERSITY: Well, I‘m very troubled by it. I want to say at the outset, just to piggyback off of what you‘re saying, is that Glenn Beck is more of an entertainer than he is a newsman. So we need to keep it in that context. But there‘s so many reasons why this comment is in poor taste.

Number one, there are actually a small pocket of Americans that are deeply troubled by the fact that we have an African-American president.

SCHULTZ: True.

PETERSON: And unfortunately, the Rush Limbaughs and Glenn Becks play to that audience. They make a lot of money off of that audience. And unfortunately, they‘re exhorting that audience now towards hate. So, we do need to push back a bit, but let‘s also keep it in context.

It‘s also quite ironic, and we have to remember, President Obama‘s mother was white and he was raised by his white grandparents. To say that he hates white culture is absolutely ridiculous and actually is idiotic if you look at his life and look at what he said about his own life.

So, he‘s of mixed race heritage. That‘s what makes him so unique as a president of the United States. But it‘s very, very troublesome to see the hate mongers out there.

And I would hope that Glenn Beck, whether he‘s an entertainer or a newsperson, would be a little more responsible. It‘s a very, very thin line between free speech and hate speech here, especially when we think about those audiences that are out there that, again, are actually deeply troubled by the fact that we have our first African-American president.

SCHULTZ: You know, Professor Peterson, I remember when Trent Lott made some comments about Strom Thurmond. You know, if we had elected this guy, we wouldn‘t have had all these other problems. And the uproar that took place across America and the outrage, but yet a broadcaster goes on and makes this kind of declarative statement and doesn‘t back it up with any examples whatsoever.

PETERSON: You know what, Ed? It‘s hate speech for those communities that are going to be incited by it.

And again, there‘s just a small minority of folk who are deeply troubled by the fact that we have an African-American president. I mean, hopefully they can just wait it out for a few years, but I live in an area of Pennsylvania where there are some folk who are certainly against this and feel some ways very personally negative about Obama being our president.

So, Rush Limbaugh, sometimes Sarah Palin, Glenn Beck, Michelle Malkin, they all speak to that audience and they all make money off of that audience. And only time will tell as to whether or not the broader swath of American society can embrace everyone and kind of bring them up to speed with where we are.

Remember, the majority culture, the so-called mainstream of white American culture, is singing its swan song for the Constitution of the American—of the United States of America. We will eventually be a true melting pot. And for some folk, that is really, really problematic. Obama represents that kind of progress, and they just can‘t deal with it.

Glenn Beck is intelligence enough to know where we are as the United States, but he‘s trying to make money. He‘s trying to make hay, as it were, in the public sphere. And he can do so with these kinds of comments.

SCHULTZ: Professor James Peterson, thanks for your time tonight on THE ED SHOW.

Thanks so much.

PETERSON: Thank you for having me.

SCHULTZ: Joining me now is Tom Tancredo, former Republican congressman from Colorado.

SCHULTZ: Where do you draw the line on something like this? If you‘re going to make a declarative statement that the president is a racist, don‘t you have to come up with some examples?

What are your thoughts on this kind of vernacular used?

TANCREDO: Well, it‘s interesting, because we throw that world around a lot. I mean, I have been called that many, many times simply because I am opposed to illegal immigration. That‘s the sum substance of it in terms of the way people respond to me on the left.

So, the use of the word “racist” is, as I say, it depends on—if you Google the definition—and it‘s really interesting if you do this. Google “racism,” and what you find that the more liberal the organization that‘s using that term, the broader the definition becomes.

The ACLU, the Southern Poverty Law Center, they have very broad definitions for what a racist is. And I suggest to you that some of those organizations use the idea that if you stereotype any particular group, if you use a stereotype for them, that‘s racism. And when the president of the United States stereotyped, which I believe he certainly did, white cops when he went after the cop in Gates, that issue there, that affair in Cambridge, when he did that he was stereotyping. He was stereotyping white policemen.

SCHULTZ: Well, and actually, he was responding—I think he distanced himself from the standpoint that—first of all, he said he had a bias to it because he knows the guy, he personally knows the guy.

(CROSSTALK)

But getting back to—wait a minute—your definition of “racist” here, because we have got a statement from a broadcaster on a network who says that the president has a deep-seated hatred for white people.

Now, come on, Tom. That‘s just not calling somebody a racist.

TANCREDO: I certainly can‘t say that. I do not know if he has a hatred for white people.

I can say that his statements and, by the way, his appointment of someone I do believe to be a racist, Sonia Sotomayor, for her racial views, by the way, that is an indication—that could be used as an indication by some that he is indeed a racist, because it‘s depending on what you use as a definition. And as I say, according to liberals, that definition is very broad and he could be captured by it.

SCHULTZ: Well, I think the words that Beck used were not very broad. I mean, I thought they were targeted right to it. It‘s very sad that you‘re throwing it at us this way when he said a deep-seated hatred for white people. I don‘t how else we can take that.

If someone said that Tom Tancredo has a deep-seated hatred for the Latino community, how the heck would we take that?

TANCREDO: Well, I would be affronted by it, certainly.

SCHULTZ: OK.

TANCREDO: That‘s the point. But I‘m saying to you, Ed, look—listen—by the way, when you talk about hate speech, this is a very, very interesting issue. How you define that is a very important thing for the United States of America, for us in lawmaking, policymaking, or for you in the media, because some of the things you say, Ed, I think, honest to God, I‘m telling you—some of the things you said even in your introduction here, some of the things you called him...

SCHULTZ: He‘s a hate merchant.

(CROSSTALK)

TANCREDO: ... hiding behind the plastic Jesus. That could be...

SCHULTZ: Wait a minute now, Tom. There‘s a lot of ways to get ratings in this business. He has chosen to label the president as a person who has a deep-seated hatred for white people.

SCHULTZ: Look, here‘s the bottom line here. There is someone out there who is using freedom of speech and hiding behind that to be a merchant of hate and to push the issue on people that is simply not true. And he cannot back it up with any instances. And I think your instance of Sonia Sotomayor is really a reach.

I completely cosign with the professor from Bucknell with everything that he had to say, but I also think it‘s worth pointing out that you weren‘t just talking about Barack Obama in calling him a racist. You were calling the president of the United States. So, you were basically being oblivious or dismissive of the position that he holds and the integrity that comes along with it.

You wouldn‘t say that about anybody else. You‘d be highly reluctant to do so.

And this is also the same Glenn Beck who went on “The View” and said, you know what? I‘m an entertainer, I‘m not a reporter. I don‘t necessarily do my research. The facts don‘t particularly matter to me.

SCHULTZ: So, isn‘t he abdicating his responsibility to throw out something like that? And there are rabid followers out there on the hard right wing that respond to this kind of stuff.

SMITH: Well, not only do I think he‘s abdicating his responsibility, I think he‘s definitely fanning the flames. And I think because he‘s one of those people who genuinely feel the way that small minority may feel.

SCHULTZ: Yes.

SMITH: And I think that‘s what you can‘t escape in all of this situation. This guy has the pulpit to say what he wants to say to whomever he chooses, and the people who follow him, evidently, he believes that‘s an audience that would be receptive to what he‘s saying. So, therefore, he said what he had to say because he knows he‘s going to have a support base behind it, which shows you how unhealthy this country potentially is.

SCHULTZ: Absolutely.

Now, this has happened before. Around the events of Katrina, President Bush was labeled by some as a “racist.” He responded to it. Here‘s what he had to say.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, FMR. PRESIDENT OF THE UNITED STATES: Somebody—I heard, you know, a couple of people said Bush didn‘t respond because he‘s a racist, or alleged that. That is absolutely wrong and I reject that. Frankly, that‘s the kind of thing that, you can call me anything you want, but do not call me a racist.

(END VIDEO CLIP)

SCHULTZ: Should the president of the United States respond at this point?

SMITH: I don‘t think Barack Obama should respond to something—I don‘t think he should dignify it with a response at all, because this is just Glenn Beck sounding off. In the case of former president George W. Bush, it was highly appropriate for him to do so because we were talking about the aftermath of Hurricane Katrina, the lives that were lost, things of that nature.

SMITH: It was a much more serious matter. You had a lot of people that felt like he mishandled that entire situation. This is small time compared to that.

SCHULTZ: Well, this is the same pattern. These are the TEA partiers. These are the birthers. This is the narrative. They want the man to fail, and now they‘re labeling him, hey, he‘s a racist, has a deep-seated...

SMITH: But in fairness to those people, the TEA partiers, as you so eloquently called them, you have people who want him to fail because they believe he‘s making a move towards socialism. Whether they‘re correct or not is irrelevant. That‘s what they believe. That‘s entirely different than labeling them hate mongerers or...

SCHULTZ: Birds of a feather flock together.

SMITH: I‘m just saying, you don‘t want to taint everybody with that broad brush. I don‘t want to get that extreme.

Glenn Beck and what he said, and the audience that he has for those kinds of statements, is entirely different than right-wingers who have a problem with President Obama‘s policies.

SCHULTZ: But Stephen, it‘s the conservatives who always come out and say, I think that you should disavow yourself from the Cindy Sheehans of the world. And do you disavow yourself from that claim?

They do this all the time. So, do the Republicans—do the conservatives, do they embrace and that‘s where this goes? Where‘s the end to it?

SMITH: Well, certainly they should speak out about it. But let‘s be fair.

I think we can see extremism to the left sometimes, too. But clearly, they need to address the situations as it pertains to Glenn Beck and disassociate and distance themselves to it if they definitely want to cater to that audience and show mainstream America, you know what we are, not this far gone.

SCHULTZ: Stephen A. Smith, good to have you with us tonight. Thanks so much.

SMITH: Thank you.

SCHULTZ: Coming up, President Obama says he‘s got a plan that will protect you from insurance company abuses. I‘ll ask a former insurance industry bigwig if he thinks the president can really beat the suits at their own game.

Plus, new numbers coming out from NBC News and “The Wall Street Journal” poll. New numbers. They are interesting.

Where do the American people stand on all of this health care stuff?

And House Majority Leader Steny Hoyer will join us coming up on THE ED SHOW. He‘ll have reaction.

Stay with us.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: Some folks have specifically said on the other side, the more we can delay, the better chance we have of killing the bill. Because what happens in Washington is, the longer it takes, the more the special interests can start getting in there and trying to knock it down.

We will not sign a bill that isn‘t right for the American people. And I‘m for the public option.

(END VIDEO CLIP)

SCHULTZ: That was President Obama at a town hall meeting in Raleigh, North Carolina, today.

Now, I wish he would have said, “I won‘t sign a bill without a public option,” but I‘m glad to here that he‘s got those words back in the stump speech.

Now, the president is worried that, of course, the delay is going to help the lying machine just go out there and kill reform. The month of August is going to be crucial.

Now, I agree with him. That‘s why I wanted the Congress to cancel their break, to stay in Washington, get this thing done. Go to reading class, whatever you have to do.

The profits these insurance companies are making, folks, absolutely, they are obscene. They‘re out of this world.

They are bilking patients with outrageous premiums, then using the money to lobby against an affordable plan that the president has been advocating all along by making people think that government health care would lead to rationing, wait lists and even euthanizing seniors.

Joining me now is Wendell Potter, senior fellow on health care for the Center for Media and Democracy. He‘s a former vice president for the insurance giant Cigna.

SCHULTZ: Did you ever think that it would get to the level where they would be saying that we‘re actually going to kill people under a health care plan? Because that‘s basically what they‘re saying.

POTTER: Yes, I did anticipate that, and I do believe it, because it is just part of the scare tactics that have been planned for quite a long time. And they‘ve been a central part of the health insurance industry‘s campaign to kill any kind of reform over the past several years.

SCHULTZ: Now, do they have a war room? I mean, do they pay attention to polls? Do they pay attention to the way the American people are receiving all of this? And are they organized in the way they want to attack it week by week?

POTTER: Oh, absolutely. They‘ve been anticipating this and planning for this for a long time. They knew this was coming. They‘re very well organized.

They poll almost on a monthly basis to find out where the public‘s opinions are. And also, they do an enormous amount of research into what massages resonate with the public. And that‘s how they come up with the language they come up with to scare us with.

SCHULTZ: How do you think the Obama administration should counter all this, and advocates who want real reform? How do you fight back on it in your opinion?

POTTER: I think you need to counter what they‘re saying. I think you need to call them out and call them lies, because they are lies. And make sure that people understand who‘s paying for them and where they‘re coming from, and that a lot of these people who are studying them are just shills for the industry, including many people on the Hill, Capitol Hill, members of Congress in both the House and the Senate.

And further, I would counter it with truth tactics, because I think the truth of our American health care system is far scarier than any scare tactics or false scenario that the opponents could paint. That‘s what I would do. I would make sure that people understand that Americans are just a layoff or a business failure away from being in the ranks of the uninsured, and more and more of us are going to be in the ranks of the underinsured if the health insurance industry continues to be in control of the health care system.

SCHULTZ: Is it fair to give a definition in this manner about the insurance industry right now, that they are ruthless, they will do whatever it takes to defeat this?

POTTER: Absolutely. The public option is the one thing that they pulled out all the stops to defeat. And the evidence is that they‘re winning a round or two.

They certainly won the round of making sure that nothing was voted on, on either floor of the House or Senate, before the August recess. The fact that the Senate Finance Committee might be voting out a bill without the public option is a huge victory.

Yesterday, the share price of the seven largest for-profit companies rose dramatically because Wall Street investors believed that there was increasingly less likelihood that the public option would be included. Aetna‘s stock yesterday was up more than 12 percent in a single trading session.

SCHULTZ: Because it looks like the public option is in trouble in some corners.

POTTER: Exactly. And the investors applaud that.

SCHULTZ: Mr. Potter, great to have you with us tonight. Thanks so much.

POTTER: Thank you.

SCHULTZ: “Do whatever it takes.” You know, Chuck Noll, the old football coach of the Steelers, put that up on the locker room once and put, “DWIT,” “Do Whatever it Takes.” That‘s where that industry is right now.

Up next on THE ED SHOW, “Psycho Talk.”

Republican Minority Leader John Boehner says he doesn‘t know one doctor who supports the House health care bill?

John, I‘ll help you find one and maybe you can get your head examined in your own state of Ohio.

In “Psycho Talk” tonight, you know, maybe we better change the name of the segment to “Stupid Talk.”

Tonight, House Minority Leader John Boehner, he‘s sticking to that same old GOP “Just say no” line on health care. Now he‘s saying the House health care bill, no good. It doesn‘t work. Doctors don‘t like it.

Check it out.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER ®, MINORITY LEADER: Well, you have yet to talk to a doctor who is supporting the plan that‘s moving through the House. And for the American Medical Association to come out in support of this plan, even though I would think a great majority of their doctors are opposed to it, strikes me as inconsistent at best.

(END VIDEO CLIP)

SCHULTZ: He hasn‘t talked to any doctors who are supporting the health plan.

Congressman, you need to get out a lit bit more. Maybe get out of that tanning parlor or off the golf course and talk to a few folks.

Now, the folks at ThinkProgress.org point out that the grassroots organization Doctors for America, they support the major components of the House bill. Doctors do that, including the public option, by the way.

That‘s a bunch of doctors supporting the House bill. We got that? They have, let‘s see, almost 14,000 members nationwide; 360 of them even live in Boehner‘s home state of Ohio.

Now, you might think 130 health care organizations also support the bill. That‘s a number you have to take under consideration. We made a list of them. John, if you don‘t get out and talk to a whole lot of folks, we can help you out with phone numbers, because I‘ve got them. I will share them with you. We could even set up a conference call. You don‘t have to say anything, John. You don‘t have to say a word. All you have to do is listen to what‘s actually out there.

It‘s not doctors who are balking reform. It‘s the GOP and their buddies in the insurance industry and the House minority leader implying that doctors don‘t support the House health care bill, just because he hasn‘t taken the time to talk to any of them. That is Psycho Talk.

Coming up on THE ED SHOW, House Majority Leader Steny Hoyer joins me with the latest in the battle over the health care reform. Four Blue Dog Democrats stepped forward today and said they‘re on board. I‘ll ask the Majority Leader how he‘s going to deal with that and the American people.

And Glenn Beck calls the president a racist. Right wing crazies are saying the president wasn‘t born in the USA. I want to know what the heck is going on here. It‘s all coming up. Stay with us.

I also want to know what you think about the right wing verbal attacks on President Obama. I want you to text A, free speech, B, hate speech. Right there, the number is 622639. We‘ll bring you the results later on in the show. Stay with us. You‘re watching THE ED SHOW on MSNBC.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. Our NBC News/”Wall Street Journal” poll just released a moment ago. I have a message for the Congress, to the president. This is the end of the first half and the score is pretty much tied. I said yesterday that the Republicans are winning this health care fight in the sound machine. That‘s true right now. Americans are a little confused. They want more information. They want to know where the Democrats stand.

But the country wants action. Check this out; 94 percent of the people say they will be concerned if Congress cannot pass a health care reform bill. Bottom line, 56 percent support the president‘s plan. More people than not want a public option. Democrats have a 17 point advantage over Republicans in who the American people trust to handle this issue of health care.

So we need to get this done, folks. I know that Congress is getting ready to take a break. We‘ll call it half time. Then you come back on the field and you‘ve got to get ready to get this thing won. News today, Blue Dog Democrats and House leadership got a little bit closer to an agreement.

Joining me now for all of that on this breaking story is House Majority Leader Steny Hoyer. Steny, great to have you with us tonight.

REP. STENY HOYER (D), MAJORITY LEADER: Ed, always good to be with you.

SCHULTZ: What do you make of these numbers? Are you losing the PR war on health care reform in this country? Where are you at right now?

HOYER: I think clearly the American public has been watching a part of the debate, both in the Senate and the House, as we go through the committees, and they see a lot of different opinions, as you would expect in a Democratic debate. But I think they understand, and that poll reflects it, that A, they want a health care reform bill; 94 percent of them, you say, are concerned that we won‘t get the job done. I want to assure them we‘re going to get the job done.

And as you said, a little earlier, we made significant progress last night. The Energy and Commerce Committee is back at the table, marking up their bill. They‘re the third committee, the final committee to mark up the bill in the House. We expect them to pass that out some time later this week. Then we expect to take the month of August, do a lot of hard work, looking at this, have the American public look at this, give us their input.

We expect to come back here after halftime, as you point out, and we‘re going to score a touchdown for the American, and give them health care they can count on.

SCHULTZ: I tell you what, congressman, this is going to be a brutal halftime. I mean, the grassroots of this country are going to have to get together and get after it, and let the Congress know what they think. Now, under President Obama‘s plan—this was one of the questions—my health care plan would be same or better? Fifty percent are scoring it that way;

39 percent of the American people think under the president‘s plan it would be worse. What‘s your response to that? That‘s a high negative number, isn‘t it?

HOYER: It is a high negative number, which means we have some education to do, because the right answer is it‘s going to be the same or better. And if you don‘t have it now, you‘re going to have an option. If you lose your job and lose your insurance, you‘re going to have an option. You‘re going to have a guaranteed health care insurance option available to you at a cost you can afford.

So those aspects are obviously very important to all the people who have insurance. By the way, one of the things that‘s important to those of us who have insurance, we‘re paying a lot of our premium dollars for those that aren‘t included in the system and aren‘t paying into the system. This bill is going to provide for everybody to be in the system, and to pay up just like automobile insurance. We think that‘s a step forward for the American people.

SCHULTZ: Steny, here‘s another number that I think really jumps out at the American people. President Obama‘s health care plan is -- 42 percent say bad idea, 36 percent say it‘s a good idea. But this 22 percent not sure and no opinion. Aren‘t these the folks you have to win over to make this thing work? And how are you going to do that? It sounds to me like you‘re going to have to go on a major PR campaign. We just talked with Wendell Potter about, you know, the insurance industry is ruthless. They are win at all costs. They‘re fighting back on any kind of reform.

What about that high number of 22 percent of the people not sure where you stand?

HOYER: Ed, under the current system, insurance profits have gone up 426 percent. Salaries of executives—as a result, of course they‘re going to defend the status quo. But the American public in that 56 percent and 94 percent number know that the status quo is not good for them. They‘re worried about losing their job, losing their insurance, costs going up, having the insurance company, when they get sick, not let them sign up for another year of insurance. Their child or their wife has a pre-existing condition and they can‘t get insurance. They want us to do it and we‘re going to do it. They want us to do it and we‘re going to do it.

SCHULTZ: Congressman, how much of a loss is it that there‘s not going to be a vote in the House before the recess?

HOYER: I don‘t think that‘s a loss. I think we‘re going to get it out of committee. We‘ll have all three committees. And then people can take a breath, look at what we‘ve done, look at where we are. The Senate is not going to move its bill. It‘s clear that this bill, the conference report is going to occur in the fall. So I don‘t think we‘ve lost anything. The fact that we moved ahead was a tremendous step forward by getting it out of committee this week. So I think we‘re making progress. We‘re creating consensus. The American public is with us. We‘re going to get this thing done.

SCHULTZ: You‘ve got to get this thing done. House Majority Leader Steny Hoyer, great to have you with us tonight, Steny.

HOYER: Thanks, Ed. Thanks for all you do.

SCHULTZ: You bet. For more, let‘s bring in our panel tonight. Laura Flanders is the author of “Blue Grit” and host of GritTV.org, Sam Stein, political reporter for the “Huffington Post,” and John Feehery is a Republican strategist. Laura, let‘s start with you. What do you make of these numbers?

LAURA FLANDERS, GRITTV.ORG: I‘m concerned about the numbers, but what do you expect when the lobby for the private health insurers are spending 1.4 million dollars a day trying to get the public to misunderstand this. There‘s also a media issue here. You‘re one of the few that‘s helping the public understand what‘s in this bill. Most of the media are doing the horse race politics.

SCHULTZ: Is Steny Hoyer spinning right there? Are they losing this PR battle?

FLANDERS: It‘s temporary. I do believe it‘s temporary. I think this half time battle, you‘re exactly right, it‘s the grassroots that are going to make the difference. People need to hear from their constituents. The House needs to hear from their constituents. The only thing that‘s killing people out there right now is the status quo.

SCHULTZ: Sam Stein, the president has been out on the campaign trail. This has been his conversation piece for the last three weeks. Barack Obama losing ground, what‘s happening here?

SAM STEIN, “HUFFINGTON POST”: Yes, what I found remarkable in the poll numbers was that as the president has tried to extend a bipartisan hand on this health care, much to the chagrin of a lot of progressives, he‘s actually become more of a partisan figure. More people view him negatively now than they did a month ago. More people are disinclined to support his health care plan, despite the fact that he‘s been open. More people aren‘t sure if it‘s going to improve or keep coverage the same, even though he routinely says that you can keep the coverage you‘re with.

It‘s clear through these numbers that the president and the White House are losing this public relations battle, and the president himself is getting damaged by it in the process.

SCHULTZ: John, how do the conservatives and Republicans play these numbers? What do you think?

JOHN FEEHERY, REPUBLICAN STRATEGIST: I think that Republicans are going to look at this and say, OK, how can we get a plan that the American people like, that is actually going to fix the program, without actually having expanding costs, that‘s not going to cost more than trillions of dollars, which is not going to add to the deficit, and not going to force people into a government plan.

Ultimately, I bet you the Republicans actually get a plan that works that way, does not force people into public option, that you call it, government run health care, that other people call it. I think Ken Conrad and Chuck Grassley are going to cut a plan in the Senate that‘s going to hit the insurance companies. But it‘s not going to put us in bankruptcy and not going to create a huge government program.

SCHULTZ: I am not a fan of the co-op. Let me just say, I think that‘s a cop out.

FEEHERY: I know you‘re not, but I bet you that‘s what happens.

SCHULTZ: I don‘t think. I respect your opinion and everything. I know that Conrad is a heavyweight and so is Baucus. They swing a big stick. But Laura, the American people didn‘t here anything about a co-op on the campaign trail.

(CROSS TALK)

SCHULTZ: When does the president say no to cop; this is not what I campaigned on?

FLANDERS: At least he said public option yesterday. You were right about that. Absolutely, he needs to say no compromise. If you‘re in a building on the second floor and the building‘s on fire, going to the first floor doesn‘t help you. We need to go to safe space. We have got to have a robust public option. Frankly, this would all be simpler if the Democrats had just got behind public single-payer, non-profit public health care.

FEEHERY: Public option‘s not going to happen either, Ed, I guarantee it.

SCHULTZ: I think the public option does have a chance. The Senate Health Committee has got put the hammer down. And then of course Nancy Pelosi and Steny Hoyer has to put the hammer down. And the Ways and Means Committee is going to have to explain how they‘re going to pay for this. Sam, sooner or later, the American people are going to won‘t to know, OK, who‘s got the ching to take care of this.

STEIN: That‘s the take-away that I get from looking at these numbers. Again, Barack Obama has, to a certain extent, extended his hand out to Republicans. He‘s been willing to cut down on the size of the public option. He‘s now floated the idea of doing co-op.

What has he gotten in return? Very little popularity. I mean, you see his plummeting.

(CROSS TALK)

STEIN: -- willing to work with Republicans than he was before the health care battle. You talk to progressives and people think it‘s crazy, that he‘s working way too much with Republicans.

SCHULTZ: It is. It‘s overboard. John, no offense, I don‘t want to work with you on health care.

FEEHERY: That‘s the problem. You have to work with me. If you want the votes, you have to work with me.

SCHULTZ: Panel stay with us. We‘ve got a lot more coming up. Today, one of the righty fell off his rocker. That‘s right. Congressman Louie Gohmert jumped on board the birther bandwagon, folks. You may be surprised how many people actually believe this junk. Well, we‘ll take an inside look at the lunatic fringe later on THE ED SHOW. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: In my playbook tonight, the Finance Committee has been holding up health care reform for the last month. Today, Chairman Max Baucus finally announced a draft of the Finance Committee bill. It does not include a public option. It‘s a co-op. More on this in a minute.

Baucus claims that their plan would cover 95 percent of Americans by 2015. I hope I‘m still alive in 2015. Conservative Democrats who support the co-op idea say it would put the power in the hands of the consumers, not the government. Now, critics say it will keep the power and the money in the hands of the insurance companies.

I want to get the real deal on the co-op versus the public option. Joining me now for the details is Jeanne Cummings, assistant managing editor for “Politico.” Jeanne, good to have you with us.

The co-op, we first got the first details on this last night. Can you tell our audience, what are the big points about a co-op that are being pushed by the Finance Committee.

JEANNE CUMMINGS, “POLITICO”: The co-op obviously is less expensive and doesn‘t involve the government. That‘s one of the big pluses for them. And then also, there are successful models of co-ops out there. But there have also been some misses. Co-ops are owned by the people who belong to them. What has been a problem in some cases is getting enough critical mass that a co-op can attract real competition between the insurance companies, and negotiate good prices. If you want a big, strong co-op, you want to be as big as GM and you want to be as big as GE. Those are the people who can really negotiate with the insurance companies. That‘s part of the difficulty.

SCHULTZ: That‘s a good point. I understand it could be an a state level, could be on a regional level, to include a number of states. To get this big pool of people, they would go out and negotiate the rates. But the start-up costs, I‘m hearing, would be about six billion dollars. You compare that to Wall Street, the kind of money they got. Is that going to fly with the American people?

CUMMINGS: Well, we‘ll have to see all the details in Baucus‘ plan to see where that money would come from. But obviously what they are looking for is to put a system in place that would ultimately save money. If you‘re going to build a new system, it‘s going to cost you to build it.

SCHULTZ: All right, here are some of the numbers from our NBC/”Wall Street Journal” poll; the handling of the health care issue, President Obama, 46 percent disapprove, 41 percent approve, and 13 percent not sure. Gosh, after all this talk, we have a bunch of disapproval out there. And now coming out with a co-op, is this going to be hard for the American people to grasp. There are a lot of details here. What do you think?

CUMMINGS: There are a lot of details here. I think that those polls are going to stay pretty murky through August, until there‘s some real resolution. We‘re still three major steps away from one final bill that the public might be able to try to absorb and decide whether it likes it or not.

But the process right now is ugly. It is sausage making. And I‘m sure there are plenty of people out there who don‘t get it, who are angry their side isn‘t winning. And so those pole pols are going to be—they‘ll be murky for a while, because, right now, the situation is so fluid.

SCHULTZ: All right, thanks, Jeanne. I appreciate your time tonight.

Thanks so much.

Now, I‘m going on vacation next week. I‘ve got a reading assignment. I‘m going to read the Senate Health Bill, because it‘s got a public option in it. And I‘m going north of the border far a critical assignment on all of that.

Coming up, Glenn Beck called the president a racist. Birthers are multiplying in numbers. Tea partiers are erupting. The lunatic fringe is getting louder. What in the heck is going on here? I will put it to the panel when we come back on THE ED SHOW. Stay with us.

(COMMERCIAL BREAK)

SCHULTZ: Welcome back to THE ED SHOW. You heard my thoughts on Glenn Beck earlier in the op-ed tonight. Let‘s bring in our panel, Sam Stein, and John Feehery with us tonight. Sam, why wouldn‘t the president respond to this kind of rhetoric out there. He gave a big speech on race during the campaign to respond to the Reverend Wright controversy. Why wouldn‘t he respond to something like this, just to shut him right down?

He‘s been accused by a major broadcaster on a major cable network of having a hatred for white people.

STEIN: I think the answer to that stems back to what happened with the press conference when the Gates issue initially arose. That was a press conference designed to focus the attention on health care. It was about 50 minutes in. And they‘re about to get out the door. And then the Skip Gates question came in. All of a sudden, the next three or four days, everyone was concerned with racial profiling, what did Obama do, why did he step into this conversation.

Elevating Glenn Beck to the level of president, it doesn‘t do them any good at a time they want to focus the country‘s attention on health care. I think the White House know this. They have raised Rush Limbaugh in the past. They didn‘t want to do it again with Beck.

SCHULTZ: John, is it important for Republicans to distance themselves from this kind of talk?

FEEHERY: Look, when Kanye West called George Bush a racist, I thought it was outrageous. Glenn Beck doing the same thing to President Obama, I think it‘s stupid and outrageous. The fact of the matter is we need to get beyond the racism charge and start thinking more about personal responsibility and how we can better ourselves and look at each other as individuals and not through race.

I think Sam is absolutely right. For the president to address this would be a waste of his time and a distraction.

SCHULTZ: John, you were with me on the set after the press conference. And you called it. You thought the press conference was not the right call to make for the president. And now these numbers have come out after that press conference. What‘s his next move?

FEEHERY: He‘s got to keep focused. That‘s what presidents—if they want to get their agenda through, keep focused. Don‘t get in places where you can make news that you don‘t want to make. And if you are going to try to make news, make real news, don‘t just give campaign speeches.

SCHULTZ: He went to North Carolina and he‘s going to Virginia. Sam, are those the right places to win this fight?

STEIN: You‘ve got to get out of Washington, that‘s one. So North Carolina and Virginia are obvious choices, because they are traditionally red states, so to speak, and it shows that Obama has strength and appeal in Republican and independent districts.

He needs a game-changer. He needs the topic of conversation not to be about health care‘s imminent death. We need to talk about something that‘s positive. We need something that will get the narrative for the White House. That‘s what they‘re hoping for. There are just not many cards to play right now.

FEEHERY: Let me jump in real quick. I disagree with you. I think he needs to stay in Washington, keep the leaders in Washington. And if he wants progress, he‘s got to make news-cutting deals.

(CROSS TALK)

SCHULTZ: I am all for the August workers. There‘s no doubt about that. Good to have you with us tonight.

That‘s THE ED SHOW. I‘m Ed Schultz. We‘ll be in Portland this Friday night, Portland, Oregon, town hall meeting. For more information on that, go to our website at WeGotEd.com. Appreciate you joining us tonight. Coming up next, “HARDBALL” with Chris Matthews, starts right here on the place for politics, MSNBC.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.